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Financial planners anyone?

Discussion in 'Financial Planning' started by mumeco, 1st May, 2008.

  1. mumeco

    mumeco Active Member

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    Hi All
    I am a newbie, although a rather jaded newbie. I had a financial planner that I joined a few years ago when I started work. (I work as a doctor, which will bring out teeth gnashing as you think to yourselves "ignoramus!").
    Alas, yes, so be it.
    But now, having had some time to contemplate our finances, I realise the the planner was giving us products that really suited them at the time, without explaining many alternatives and getting into detail about options. I think they thought, correctly, that I was naive and gullible.
    I haven't lost too much money yet but have an expensive mortgage and a non-descript managed fund.

    Everything I read seems to say "get a financial planner!" But HOW and WHERE? I have been to Guest McLeod and Dixon advisory in my search for a new planner, but both seem expensive (> 1% ++ of assests under advice). Is this a standard fee? I want a fee-for-service advisor. Someone who is smart. Anyone got any good tips?
    PS: Please, PLEASE don't write me off too much. I am new at taking charge of my money.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I acknowledge that you are probably very time poor - but I still suggest that the first step is always to learn to take care of your own money. Financial literacy amongst professionals is often quite low - mostly due to the time factor.

    If you understand the strategies being used and the products that are being suggested, then you are much more likely to be comfortable with where your money is being invested and how it works for you.

    Rather than outsourcing my financial wellbeing to a third party - I prefer to use them in an advisory capacity only (meaning that I take responsibility for my own finances but use a financial advisor as a sounding board and for an alternative point of view).

    So my first suggestion is to hang around here on InvestEd and learn as much as you can!

    I'll let other people make suggestions about financial planners you might want to try. I know a lot of people here use Navra Financial Services - so there's one suggestion I guess. Our own Nick Moustacas from Strategic Wealth Management is a very investment savvy accountant I use myself. Details here: http://www.invested.com.au/services
     
  3. AsxBroker

    AsxBroker Well-Known Member

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    Hi Mumeco,

    >1% ongoing is on the expensive side of things.

    The Financial Planning Association of Australia suggest ongoing fees which can reasonable be expected are between 0.6% to 1.0%

    Someone who is smart, after meeting a planner, you should be able to ascertain reasonably quickly whether or not they are smart...It's a bit like going to a doctor, in the first 10 minutes you'll make the call on whether or not they know what they are talking about.

    You want fee-for-service, that's going to be more expensive...But that's what you want...

    Though boutiques are typically more expensive than larger licensees. Personally, I like larger licensees, in the worse case situation where a planner has totally lost the plot, a bank (whether retail or investment) will have substantially deeper pockets if they have to pay compensation to clients than a boutique, who may go belly up (maybe this is why they have higher ongoing costs?). You could compare Opes and any other small broker to a Macquarie, UBS, GSJBW, the small broker has a higher chance of folding than a substantially larger conglomerate who can take larger losses (Also that reminds me of NAB losing some FX, I don't think many smaller financial companies could sustain such a massive hit, approx $360m of write downs).

    What products did your previous financial planner give you which you think suited them more than you?

    I think it would be hard to find many people that are invested that haven't had a negative result (except being invested in cash/term deposits).

    You can find planners here (Find a Planner) for your local area. I wouldn't necessarily search for CFPs unless your living or working in the city as this may cut down your results. Give a few a call and ask them to send out a Welcome Kit so you can go through the services they can offer you without wasting your precious time in meetings.

    Cheers,

    Dan

    PS Let us know how you go :)
     
  4. tropic

    tropic Well-Known Member

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    The biggest issue with financial planner is finding a good one. A fee of 1% or more I feel is acceptable is they deliver a good return for your money.
    Someone said you need to have a financial planner that is successful in investing himself.
     
  5. mumeco

    mumeco Active Member

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    What suited them better

    Thanks for the advice....
    I have been trying to educate myself, but given my medical background, I am pretty far behind in the financial literacy books.
    What suited the financial planners better? Well...they got me to buy a property off the plan, with a punt on the tax breaks (I was working full-time then on a high marginal tax rate). They actually had a property manager as part of the company, a so-called "buyer's agent", who did all the research etc. But now, the property is apparently trying to claim for faulty construction. And given that I paid premium price for it, it hasn't gone up much over 7 years. Also, they got me to change my Super fund from an industry super with low fees to a retail one, with high fees and comparable returns. Methinks commission had to do with this one. They queried me purchasing into a Commonwealth Trust and asked why I got my own managed fund. oh, and they negotiated my home loan with NAB, and now I am paying 900 a fortnight with 340 a week rent coming in.

    Also, once they got me to sign into all this stuff, they have been hard to contact, have high staff turnovers, lost files, don't reply emails...all this deterioration in the last 12 months. I think they have just over extended themselves as a company.

    But you know what? I would be happy to pay someone a commission if they were truly in tune with our needs. I'm just much more cautious now. I don't earn much so I really have to be careful with where my money goes.

    Naive & stupid, yes, yes...should have done more research, yes...but they honestly don't teach us anything about money in medical school!!
     
    Last edited by a moderator: 1st May, 2008
  6. Seamus

    Seamus Member

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    I'm not sure if you were introduced to the dodgy financial planner through work, but if so, don't feel like you're the only one that this has happened to.

    I have a number of friends who are doctors and they have all had problems with financial planners that claim to specialise in advice for doctors. It seems like they are seen by some as likely targets. I'm not sure the gullible tag necessarily follows, but time-poor and (at least for some) income-rich generally does.
     
  7. mumeco

    mumeco Active Member

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    Reply

    Yes you are right!! We are gullible, time-poor and uneducated about finances. And we hence are easy targets, as we don't seem to have the time to learn about finances on top of all the medical schooling/post-grad exams blah-blah.

    I don't know about income rich. I earn 46 dollars an hour before tax. And I have been 9 years in the work force!
     
  8. AsxBroker

    AsxBroker Well-Known Member

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    That's not so good, I have heard of a few financial planners who are keen on direct property as they get large kickbacks or commissions (same as real estate agents).

    I do know of another group who do "specialise" for doctors, whether or not they recommend property I don't know.

    I am interested in their "reasonable basis" to roll you out of your Industry Super fund...

    If you are still quite upset (which you maybe) you should write a letter to their Compliance Manager telling them why you think they have not done the right thing and possibly put you in a worse situation.

    After 45 days you can then complain to FICS (Financial Industry Complaints Service Limited - LODGE A COMPLAINT) if they are a member of FICS. Or some other complaints resolution scheme, you'll find the details in the back of the Financial Services Guide/Advise Services Guide which they originally gave you.

    Let us know how you go.

    Cheers,

    Dan
     
  9. Dee

    Dee New Member

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    Hi

    I believe you should start of with this website. Scroll down and just start reading.

    index. Terry McMaster. Adrian McMaster. Accountants, Solicitors, Financial Planners. Brighton, Melbourne, Australia.

    Although it is specifically dedicated to Doctors others in the forum would also be interested in reading their info. I think these guys are great in what they advise. Like many on this forum, I would not touch a financial planner with a 10 foot pole. Main reason is I have never heard a single person say my financial planner helped me supplement my income.

    Think being time poor is not a valid reason and more of an excuse. A person with average intelligence could learn the fundamentals of investment in a short period of time. You never know you may enjoy it!!! :)

    take care
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Hi Dee - welcome to the forums. Why do you recommend this website? Are you affiliated with the company in any way ?
     
  11. Rob G.

    Rob G. Well-Known Member

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    Hi Sim,

    Without making any recommendations, their published articles and educational material are well regarded by some.

    This might suggest that they can call on a wider range of resources for the Medical specialists.

    That is another thing to consider with a larger firm, you often have legal specialists either there or on retainer to peruse your plans. This is often better than a small print footnote disclaimer saying you need to pay for additional taxation and legal advice.

    Another option is to ask the AMA if they have a list of recommended planners.

    Cheers,

    Rob
     
  12. Jacque

    Jacque Team InvestEd

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    Hmm.....sounds like they definitely weren't independent and flogged you new stock for which they no doubt received a commission (fairly common practice amongst FP's who recommend direct property investments). It would have been disclosed, or else you would have paid the BA a fee.

    Do a licence check on the BA who helped you to see if they truly were independent Property services licence check - NSW Office of Fair Trading

    Agree that FP's and fund managers see the medical profession as soft targets, given the perception that you're all filthy rich and don't know how to manage your money ;) It's ok... I understand, as my partner is in the same boat but has educated himself on the finance side of things as well- did the FP courses some years ago now (Dip in Financial Planning, Certificate in financial markets) and, though he still relies on our excellent accountant (NickM) for advice, he at least has a basic understanding of our finances and we have plans :)

    Read as much as you can on here- there are some excellent objective opinions from very seasoned investors and you'll learn a lot more than you would simply throwing your money at an FP and not being any the wiser.

    Welcome aboard :)
     
  13. Seamus

    Seamus Member

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    Yeah, that tallies up with what my friends have reported though I haven't become involved enough to scrutinise their paperwork and fees.
     
  14. Dee

    Dee New Member

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    Hi Sim

    I am not affiliated with them. I ended up printing off a lot of their information from their website and feel bad for taking all the free info and not advising others about them!

    I am an avid reader of anything wealth management related. So lurk around all the forums and steal as many ideas as I can. I love the living of equity stuff and rental reality.
     
  15. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    You obviously haven't spoken to any of our clients then.

    Mark
     
  16. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    Funny you should mention that, I've heard of a very large number of financial planners who are keen on managed funds because they get paid commissions! Amazing, no?

    Mark
     
  17. mumeco

    mumeco Active Member

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    The ads for Colonial First State managed funds say a lot "recommended by more financial planners"! I wonder why...??!

    Thanks so much for the above input.

    I'm starting to educate myself a lot more now.
     
  18. AsxBroker

    AsxBroker Well-Known Member

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    Hi Mumeco,

    I think the marketing went something like "recommended by more independent financial planners".

    CBA own CFS
    WBC own majority of BT
    ANZ own 49% of ING
    NAB own MLC
    SGB own Asgard

    The majority of planners work for a company who has a larger licensee, also if you went to (as an example), Macquarie Financial Planning, you would probably be advised to have investments in Macquarie funds and a Macquarie Cash Management Trust as opposed to investing through BT or MLC.

    Whether or not this is good or bad, it is more a matter of judgement. Most people wouldn't walk in to a CBA branch and open a NAB account so similar expectations should be set and realistic.

    For the CFS they may use it because they believe it's good for the client.

    Cheers,

    Dan

    PS This is not an endorsement for any financial product issued by any AFSL holder or a recommendation to use any financial planner. Before making an investment decision see your FPA registered Financial Planner.
     
  19. crc_error

    crc_error The Rule of 72

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    getting a good financial planner is the same as getting a good mechenic, doctor, lawyer or accountant.. you will get bad ones, and good ones... all of which will make money from you.
     
  20. samaka

    samaka Well-Known Member

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    ... and with the exception of maybe a doctor, you should do enough self education so they're providing second opinions rather than making decisions.